Empire State Realty Trust: A Top Long-Term Stock According to Billionaire Mason Hawkins

Empire State Realty Trust, Inc. (ESRT) has caught the eye of billionaire investor Mason Hawkins, the Chairman and CEO of Southeastern Asset Management. Hawkins, known for his value-oriented approach to investing, sees the potential in ESRT's long-term prospects. Let's delve into the specific aspects of ESRT's operations and management strategy that appeal to Hawkins' investment philosophy.

1. Deeply Discounted Prices: Hawkins has consistently invested in strong businesses with good people at deeply discounted prices. As of January 14, 2025, ESRT's stock price was around $9.61, which was below its 52-week high of $11.32 and its book value per share of $10.76 (as of December 31, 2023). This discount to its book value and 52-week high may indicate an attractive entry point for value investors like Hawkins.
2. Long-term Time Horizon: Hawkins focuses on long-term investments in strong businesses. ESRT, as a Real Estate Investment Trust (REIT), has a long-term business model that involves owning and operating income-producing real estate. This aligns with Hawkins' long-term investment approach.
3. Quality of Management: Hawkins emphasizes the importance of good people in the management team. ESRT has a board of directors with diverse backgrounds and expertise, which can contribute to effective decision-making and strategic planning. Additionally, the company has made changes to its executive team, including the appointment of a new Chief Financial Officer, which could signal a commitment to improving its financial management.
4. Strong Business Model: Hawkins invests in strong businesses with good competitive positions. ESRT's business model is based on owning and operating high-quality real estate assets, which can provide stable cash flows and potential appreciation over time. The company's portfolio includes iconic properties such as the Empire State Building, which can attract tenants and generate steady income.
5. Potential for Turnaround: Hawkins is known for investing in companies that are under duress or facing short-term issues. ESRT has faced challenges in the past, such as delayed filings and weak earnings growth. However, the company has also shown signs of improvement, such as increased occupancy rates and dividend hikes. Hawkins might see ESRT as a potential turnaround story, with the opportunity to invest at a discount and benefit from a recovery in the company's fortunes.



In conclusion, ESRT's operations and management strategy appeal to Hawkins' value-oriented approach due to its deeply discounted prices, long-term time horizon, quality of management, strong business model, and potential for turnaround. These aspects align with Hawkins' investment philosophy, which focuses on investing in strong businesses with good people at deeply discounted prices. As ESRT continues to navigate the challenges and opportunities in the real estate market, investors like Hawkins will be watching closely for potential long-term gains.